Europe’s biggest bank HSBC has defeated a proposal to divide it apart and potentially spin out its lucrative Asian sector at its
annual investor conference in Birmingham.
According to HSBC’s chairman, Mark Tucker, the bank defeated a resolution from Hong Kong-based shareholders that was sponsored by a significant investor, Ping An Insurance, to potentially split off its Asia division.
According to Mr. Tucker, the bank’s special resolutions to increase dividends and evaluate its strategy, both of which were put forth by individual investor Ken Lui, were lost.
The board of HSBC reiterated the bank’s claim that any break-up would be dangerous and expensive, and that it would damage the bank’s global strategy and income.
An HSBC spokesman said that apart from the Chinese firm Ping An, none of the bank’s top 50 shareholders voted against the board and a “strong majority” of retail shareholders also backed the board. In all, almost 80 per cent of investors voted against the proposals.
Shareholder Mr Lui said afterwards that despite the defeat he plans to keep pressuring HSBC’s management, including trying to mobilise the bank’s Hong Kong retail shareholder base in support of his position.
A spokesman for Ping An said: “We respect HSBC’s shareholders’ choices. Meanwhile, we advise HSBC’s board of directors and management to listen to shareholders’ suggestions with an open mind, and improve their operation and management to increase corporate value.”
Ping An, China’s biggest insurance company, said previously it wants the lender to find ways to boost returns to shareholders but critics have suggested that the move is being driven by politics as much as finance.
Beijing has become disenchanted with HSBC over sensitive legal and political issues, from China’s crackdown in Hong Kong to US attempts to bring charges against a senior executive at the Chinese tech firm Huawei.
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